An Operations Manager's Staff Has Compiled the Information Below for Four

question 26

Essay

An operations manager's staff has compiled the information below for four manufacturing alternatives (A,B,C,and D)that vary by production technology and the capacity of the machinery.All choices enable the same level of total production and have the same lifetime.The four states of nature represent four levels of consumer acceptance of the firm's products.Values in the table are net present value of future profits in millions of dollars.

a.Assuming a maximax strategy,which alternative would be chosen?
b.If maximin were used,which would be chosen?
c.If the states of nature were equally likely,which alternative should be chosen?

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Definitions:

Luxation

The dislocation or displacement of a bone from its joint, often causing pain and immobility.

Fracture

A break in bone or cartilage, which can range in severity from a small crack to a complete break.

Circumduction

A type of joint movement where the distal end of a bone moves in a circle while the proximal end remains in one position.

Pronation

A rotational movement of the forearm that turns the palm downward or backward.